A cynical commentary about developments in the South African financial markets and the incomprehensible activities and pronouncements of bureaucrats and politicians.

Friday, 1 July 2016

MOVE ON FOLKS. NOTHING TO SEE HERE

Even a week later, numbers of
indignant people in Britain are still battling to come to terms with the
stunningly simple process of democracy! It has been enormous fun watching how
each opinion, forecast and demand arising from the British referendum has a
life of just a few hours before being trashed by facts and developments. Adding
to the turmoil was another simple fact that Iceland scored 2 goals while
England scored 1 and the rules of soccer are quite clear what that means.

One of the larger and more enduring of the
market reactions to the Brexit incident is our own rand’s strength against
sterling. Now trading at below 20 to the pound this is a level not seen in
almost a year. It’s a bit of an anomaly since the prices of most other things that
overreacted have settled down. The London share market is almost at the year’s
high. On the JSE it’s the mining sectors which have enjoyed the best of the
year so far, although the All Share has managed just 4.3% total return over the
past 6 months.

The Chief Operating Officer at
the SABC would appear to have gone off his rocker. He has decided that the
staff at the national broadcaster need to be reminded that independence of
thought and action is not in their contract. Reportedly he has even suggested
that a staff uniform is a distinct possibility just to emphasise that
individual creativity has no place in their task of entertaining and
instructing the populace. Among his more bizarre rulings is that no images of
deeply unhappy citizens burning and destroying stuff may be broadcast, as this
might encourage others to emulate this bad behaviour. He might have a point but
in this age of the internet and subscription TV, the news of such public
displays of dissatisfaction are impossible to stifle. He has declared that he
has no idea what is meant by terms like censorship, crisis and revolt. Further
he says that despite the sudden resignation of the CEO and others, everyone is
always confirming to him that he is doing a terrific job. The SABC’s primary
offering appears to be the interchangeable genres of violent soap opera and
soccer matches. Even the weather forecast in this time of drought is
terrifying. Naturally the savage control of contents has been ordered by the
ruling party and perhaps after the local elections are finished, COO Hlaudi Motsoeneng
will be lead away to his reward.

Whatever one’s opinion of private
schooling, it’s astonishing to consider the growth of that sector in response
to the demand from parents who despair of the public system. This week Curro, a
listed company operating private schools, bombarded analysts with a volley of astonishing
numbers which perhaps inadvertently highlighted just what a problem and
opportunities the exploding population is causing for education. Even if Curro
does manage to build and find staff for another 400 schools in the next dozen
or so years, their pupil numbers will still be fewer than 1% of the country’s
school children. And still the government has yet to sweep aside the malign and
regressive influence of the teacher trade union and appoint some seriously
competent people to drive the urgent need for this country to teach our children
to read and do sums.

Brics is a very loose and all but
senseless association of five nations (China, Russia, India, Brazil and oh yes,
SA) with absolutely nothing in common; except perhaps a determination to
squeeze their partners for concessions and a chance to feel behind each other’s
couch cushions for lost spare change.Recently, however, their finance folk hatched a plan to deal with the irritation
that the rest of the world don’t rate any of the Brics very highly when it
comes to repaying loans. Our fellow’s plan is simple. They will create their very
own ratings agency which, presumably, will award everyone a AAA certificate.
Job done! Someone get the IMF on the line and ask them to send round the
armoured truck stuffed with money. Pronto.

It’s that Saturday when there is
so much sport that one needs multiple screens like a bank’s trading room in front
of the couch. Fortunately, the Durban July will divert some local attention
away from the fact I shall be in my Lions Cap and Sharks shirt for the match I
can never lose.